Chainalysis Report: Regulators Feel Unprepared for Crypto Regulation

  • According to the Chainalysis report, many regulators feel their agencies lack the training and tools needed to effectively handle crypto-related cases and crimes.

Crypto regulation has been one of the most discussed subjects in the world. However, a recent report by blockchain analysis firm, Chainalysis, disclosed that about 74% of the respondents from its recent survey felt unprepared for such heavy regulation. According to the report, crypto-based investigations require better tools and support before further steps can be taken.

Most of the respondents expressed concerns over the shortage of trained personnel in investigating crypto-related crimes, which has been on the increase since the year began. The blockchain analysis firm, Chainalysis, said it surveyed about 300 from 183 public organizations in the US and Canada to better understand the difficulties and achievements of working in the crypto space.

The vast majority of respondents claimed that cryptocurrencies were important to their inquiries and that it would be wise for their individual agencies to allocate additional funds and deploy trained human resources to the industry.

Cryptocurrencies have been at the center of some investigations across the world. But the majority of respondents acknowledged that the crypto industry could prove beneficial to the financial system. While most regulators believe cryptocurrencies are mostly used by criminals, the respondents stated otherwise. According to results from the survey, the blockchain industry has the potential to change the financial landscape of the world if well utilized.

According to Chainalysis, the number of people utilizing cryptocurrencies for genuine causes has outgrown that of criminals by a wide margin. However, the volume of crypto-related crimes is worthy of investigation. Over a billion dollars has been lost to rug pulls, hacks, and other forms of crimes since the year began.

Participants of the survey acknowledged that their respective agencies had employed the services of investigators and analysts with expertise in crypto-based research. However, the report noted that many agencies do not use specific blockchain analysis tools.

Public investors would need more sophisticated tools and trained personnel if they were to make much progress. According to Chainalysis, the crypto world is dynamic and constantly goes through changes. Most platforms are switching from centralized to decentralized finance, which entails different complexities. This change will potentially make it difficult for investigators with shallow knowledge of the industry to probe and achieve any significant results.

The bulk of the respondents also said they had experience in crypto-related cases. Some of the participants noted that they handled more than 20 crypto cases in a year, which mostly revolved around cases of fraud, cybercrime, and theft.

The public sector has a long way to go in establishing the right team needed to handle crypto-related cases. Chainalysis emphasized the need for reliable data supported by accurate blockchain analysis tools that enable quick and insightful data visualizations. 

Lawrence Woriji Verified

Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.

Latest News